Give us HDB FLat AT COST, Not 30yrs Mortgage Enslavement

last SG · 2018-02-01T04:14:28+00:00

There are two main components of cost in pricing an apt, namely the value of land and the cost of constructing the building. As we all agreed, the govern is...

Atobe SG

Does anyone have any idea what is the cost of an HDB unit ?

On Page 1 of this thread, the following was offered and which was also the subject of an earlier thread in 2009 :-

Will HDB flats be sold at the real COST OF BUILDING HDB Flats at the prices from the following articles ?

‘Cost of building HDB flats – finally an answer ? (*1)

‘ChannelnewsAsia Report (*2)

Both had reported the following:-

Channelnewsasiaarticlehdbcontract_com.mht that Singapore Exchange’s mainboard-listed BBR Holdings has secured a S$104.2-million contract from the Housing & Development Board (HDB) to build seven blocks of flats in Yishun Neighbourhood 4.

The work comprises 864 homes, a Child Care Centre, a roof garden, communal amenities and site works, as well as contingency works.

Since there will be 864 HDB flats, the average cost per flat, inclusive of communal amenities, site works and contingency works, is about $120,602 ($104.2 million divided by 864 flats).

With the latest HDB new 4-room flats at Punggol (Punggol Residences BTO) selling at an average price of $293,000 (price range of $264,000 to $322,000 divided by 2), does it mean that the HDB stands to make a profit of about $172,398 per flat, or a profit margin of about 143 per cent?

After Singapore was hit by three economic recessions - in 1987, 1997 and 2004 - each Economic Review Committee and their respective sub-committees had reported that the Singapore Government is taking too much private money through the CPF system.

This is from the 20 Percent forced contribution from Singaporean monthly wages and the prevailing approved rate from the Employers - which stands at 16 Percent.

The whopping monthly amount of 36 Percent paid monthly into the CPF fund - is accumulated throughout a Singaporean working life, which this Government can never fulfill its obligation to repay everyone when payout time occur; and this Government is resorting to a plethora of policy mechanism to whittle away its CPF debt to Singaporeans through the Medisave, Medishield, and now the CPF-Life Policies - as well as to delay the withdrawal date and reducing the withdrawal sums by increasing the balance needed supposedly for one's old age.

The ultimate Government policy in wiping its CPF debt to Singaporeans is through its HDB pricing mechanism to rob Singaporeans of its entire CPF savings - by arbitrarily pricing the HDB unit as high as the Singaporean can bear.

Considering that land has been "robbed" from private ownership through the Land Acquistion Act - in which land needed by the Government is acquired at below market rates - it is disingenious for the Government to claim that it has subsidised HDB prices by selling HDB homes at over 100 Percent of its construction cost.

It is interesting that the argument has now arrived to this point with an ingenious question of asking what should "affordability" be in pricing public housing ?

How does 'Fatum' proposed to measure "affordability" to Singaporeans - can there be common ground that is agreeable by all parties - some kind of perimeters that define what "affordability" should be ?

eagle SG

The reason why young couples cannot get the 4-rm flat , is BECAUSE the unit cost $200K+++

Now, if the price is $100+++, it will be attainable. No young couple will need to live in a 2-3rm flat, and their children won't need to grow up in one either.

Think out of the box brother Eagle.

Canadians pay 40 years of mortgage, but they still get the RETIREMENT benefit and Health care coverage.

Singaporeans pay 30 years mortgage, but NO money for retirement. Old age illness , die better.

OK ?

Also, while I agree we cannot expect the "materials" to be cheaper due to inflation. What about the LAND cost ?

According to MBT, they are charging buyers LAND cost too. That just sound WRONG. What portion this land cost goes to the overall cost ? 50% , 70% ?

It is time Singaporeans stop believing the HDB lease as an "investment" and expect appreciation.

Why must the lease value appreciate ? It has an "expiry" date at 99 years. Why are lease value expected to INCREASE after half the lease is done ?

Why is it that COE doesn't work the same way ?

Perhaps GREED has blinded our eyes from the truth. And our gahmen is riding on this GREED to rob us of our money.

Only when we realize what a 99 year lease truly means, will we see that the units are indeed OVERPRICED.

While I agree that flats cannot be built overnight. However, any Inventory Management specialist will tell you this.

KEEP BUFFER STOCKS. The longer the lead time, the higher the buffer stocks.

And buffer stocks must be of equivalent quality as the incoming/depleted stocks. Unsold stocks of a different range/class/category are NOT buffer stocks.

Forcasted demand is a VERY important factor for ALL inventory planners to consider.

Obviously, our dear million lollar MBT has failed in his inventory management and operating as an ISOLATED ministry.

This simply will not do.

The reason why young couples cannot get the 4-rm flat , is BECAUSE the unit cost $200K+++

Now, if the price is $100+++, it will be attainable. No young couple will need to live in a 2-3rm flat, and their children won't need to grow up in one either.

Just in 2005, a 4-rm flat costs $100k+. The run up to 2007 mania did not just affect Singapore, but worldwide.

Canadians pay 40 years of mortgage, but they still get the RETIREMENT benefit and Health care coverage.

Singaporeans pay 30 years mortgage, but NO money for retirement. Old age illness , die better.

Read carefully.

You just proved my point about myopic views.

Also, while I agree we cannot expect the "materials" to be cheaper due to inflation. What about the LAND cost ?

According to MBT, they are charging buyers LAND cost too. That just sound WRONG. What portion this land cost goes to the overall cost ? 50% , 70% ?

It is time Singaporeans stop believing the HDB lease as an "investment" and expect appreciation.

Why must the lease value appreciate ? It has an "expiry" date at 99 years. Why are lease value expected to INCREASE after half the lease is done ?

Why is it that COE doesn't work the same way ?

Perhaps GREED has blinded our eyes from the truth. And our gahmen is riding on this GREED to rob us of our money.

Only when we realize what a 99 year lease truly means, will we see that the units are indeed OVERPRICED.

Well said. I didn't disagree on this point.

While I agree that flats cannot be built overnight. However, any Inventory Management specialist will tell you this.

KEEP BUFFER STOCKS. The longer the lead time, the higher the buffer stocks.

And buffer stocks must be of equivalent quality as the incoming/depleted stocks. Unsold stocks of a different range/class/category are NOT buffer stocks.

Forcasted demand is a VERY important factor for ALL inventory planners to consider.

Obviously, our dear million lollar MBT has failed in his inventory management and operating as an ISOLATED ministry.

While I won't deny that his inventory management has failed, my stand still remains that government policies are usually reactive instead of proactive.

And if his planning goes wrong, and there's an over supply of flats, leading to say a 4-rm flats selling for $80k at the extreme, new buyers will be happy, but retirees looking to downgrade to get extra cash will be extremely unhappy. Aging population mah.... must make older voters happy leh...

jojobeach SG

Retirees downgrading to get extra cash ?

Now, if only the retirees or future retirees didn't have to sock so much money away into the HDB unit, will they be looking at the equity as a source of income ? NO. To them, it's their home. A place to live and die in.

Because we are forced to put so much of our income into the flat, we become nervous about the value.

However, if the price was low to begin with, and we can afford to invest in other forms of income for retirement, will we care to sell our home so that we don't starve or conduct harakiri when illness strike ? So what even if the house value depreciate, but our main source of retirement funds comes from somewhere else? The flat is still a roof over our heads, even if the depreciation is taken as a form of "rent".

Arapahoe SG

KEEP BUFFER STOCKS. The longer the lead time, the higher the buffer stocks.

And buffer stocks must be of equivalent quality as the incoming/depleted stocks. Unsold stocks of a different range/class/category are NOT buffer stocks.

Forcasted demand is a VERY important factor for ALL inventory planners to consider.

Obviously, our dear million lollar MBT has failed in his inventory management and operating as an ISOLATED ministry.

I am not sure I considered HDB has inventory planners. What we have to call them was Inventory manipulator....given the fact that there are building flats on BTO progam. The one occasion where newspaper report BTO was 50 times over subscribed....that clearly need to review the entired program of BTO.

Arapahoe SG

repeated post.........

eagle SG

Retirees downgrading to get extra cash ?

Because we are forced to put so much of our income into the flat, we become nervous about the value.

However, if the price was low to begin with, and we can afford to invest in other forms of income during retirement, will we care to sell our home so that we don't starve or conduct harakiri when illness strike ? So what even if the house value depreciate, but our main source of retirement funds comes from somewhere else? The flat is still a roof over our heads, even if the depreciation is taken as a form of "rent".

The downgrading comes when you are older because your children would have moved out, and you don't need such a big space.

On average using historical data spanning years, property prices grow at an annual compounded rate of 6+%. Putting the $$ into the flat allows it to be grown over the long run at 6+%, while at the same time providing a large enough space for a family. As you get older, you can cash out by downgrading when your children has moved out and start their own family cluster.

Also, your post is really amazing... Let's see:

However, if the price was low to begin with, and we can afford to invest in other forms of income during retirement,

We can afford to invest in other forms of income way before retirement. Why must wait till during retirement?

will we care to sell our home so that we don't starve or conduct harakiri when illness strike

If you invest for other income sources, the probability of starving is low.
Get a term insurance with rider packages, and you don't need to conduct harakiri.

Planning starts young.... I started at 25 and I consider myself late in starting. You want to start during retirement???

So what even if the house value depreciate, but our main source of retirement funds comes from somewhere else? The flat is still a roof over our heads, even if the depreciation is taken as a form of "rent".

As I said, planning starts young.

If retirement funds is a major major concern, you can always start saving very young. $300 a month saved on compound interest of 4% gives you 200k in 30 years, or 300k in 38 years supposed start work at 25 and retirement at 63.

jojobeach SG

KEEP BUFFER STOCKS. The longer the lead time, the higher the buffer stocks.

And buffer stocks must be of equivalent quality as the incoming/depleted stocks. Unsold stocks of a different range/class/category are NOT buffer stocks.

Forcasted demand is a VERY important factor for ALL inventory planners to consider.

Obviously, our dear million lollar MBT has failed in his inventory management and operating as an ISOLATED ministry.

Why in the world they need to "manipulate" a shortage for the purpose of keeping the sales price high is beyond me.

What kind of nationaly policy is that, and who does it really serve ?

jojobeach SG

The downgrading comes when you are older because your children would have moved out, and you don't need such a big space.

Also, your post is really amazing... Let's see:

We can afford to invest in other forms of income way before retirement. Why must wait till during retirement?

If you invest for other income sources, the probability of starving is low.
Get a term insurance with rider packages, and you don't need to conduct harakiri.

Planning starts young.... I started at 25 and I consider myself late in starting. You want to start during retirement???

As I said, planning starts young.

LOL.. yes you are right. my bad. I mean. FOR retirement, not DURING retirement.

I have edited the error.

eagle SG

Next, HDB is paid primarily with our CPF funds. One should buy according to what one can afford without much sweat.

So if we are just using CPF funds to pay the mortgage which we cannot even see till retirement, the cashflow we have from our take home income remains roughly the same.
That's the place where we should withdraw the cash for investing in other income sources.

Even without buying the HDB, that cashflow remains the same. The only difference is that your CPF funds would be larger.

angel7030 SG

Next, HDB is paid primarily with our CPF funds. One should buy according to what one can afford without much sweat.

Even without buying the HDB, that cashflow remains the same. The only difference is that your CPF funds would be larger.

basically, make full use of your CPF and cashflow is the most ideal way of making life richer, invest on properties, die die also invest on it, you will not loose out, you dun hv to think so much on stock and shares, just put it into properties, by and large, it will go up and go up tremedously.

On the other hand, not bearing those rebates put into CPF and medisave, if you are in business or as freelancer, 4% interest rate at CPF is not attractive enuf, you can make more with what you put into CPF, especially on an emerging Asia Market now. So, for me, i dun hv CPF

charlize SG

With all due respect to fatum and eagle, you are looking at this issue through the eyes of a university graduate who earns a relatively higher salary than the majority of the people and with a potential to earn higher salaries in the future.

It is easy to tell Singaporeans to be less choosy, buy what you can afford, save more / spend less, invest your money to grow your money, look for opportunities etc. But you are all speaking in general, for people like yourselves - young and mobile, university educated, have a decent job, with little or no family obligations yet. But is this the norm for the majority of Singaporeans?

The opponents to this housing issue as far as I can see are older 30 - 40 somethings people who have gone through a few of the economic cycles of the past 10 - 20 years eg GMS.

For eagle and fatum, you all have been relatively blessed because you have not experienced the hardships that some older people might have faced in recent years - unemployment with a family of 4 to feed and a HDB mortgage to pay off, ill health needing immediate medical attention which costs lots of money, increasing costs of living which your salaries are unable to keep pace with etc.

Your views may be right - but it might only be applicable to a certain segment of society.

If you haven't experienced what it is like to lose your job in a recession suddenly or get massive pay cuts to your salary or retrenched after working for 10 years in a company or have no money to feed your kids or have to use up all your savings to pay off expensive hospital bills for a sick loved one, then you haven't seen many things yet.

Having no money to buy food and experiencing real hunger is one of the worst things in life.

Really.

CheckmateA1 SG

why not make it to 99 yrs loan/instalement

cos it is 99 yrs lease only

like that fair and "affordable"

Dondontan SG

No helicopter view by these pple. Can they promise there will not be any changes for situation to turn negative? Many singaporeans of the same category are doing the same. singapore has no hope!

eagle SG

The opponents to this housing issue as far as I can see are older 30 - 40 somethings people who have gone through a few of the economic cycles of the past 10 - 20 years eg GMS.

Your views may be right - but it might only be applicable to a certain segment of society.

Having no money to buy food and experiencing real hunger is one of the worst things in life.

Really.

That's true on the parts of pple unemployed, I don't deny.

But hor, my dad O level education, go work, then self took A levels, now also can earn enough to support family through his hard work. And we stay in HDB.

Then again hor, my cousin's dad, also O level education, never earn as much. They also stay in HDB.

Hmmm... Same O level education, almost same age, both got families, explain the diff? Luck? Fate?

charlize SG

http://theonlinecitizen.com/2010/04/paym-policy-forum-now-i-know-why-flats-are-affordable-part-1/

βέτά SG

One must question why above 85% of Singaporeans live in public housing, the world must think Singaporeans are stricken with poverty malaise.

Public housing is a form of housing tenure in which the property is owned by a government authority, which may be central or local. Social housing is an umbrella term referring to rental housing which may be owned and managed by the state, by not-for-profit organizations, or by a combination of the two, usually with the aim of providing affordable housing.

Although the common goal of public housing is to provide affordable housing, the details, terminology, definitions of poverty and other criteria for allocation vary.

http://en.wikipedia.org/wiki/Public_housing

How to maintain the price of public housing you ask? Don't make it tradeable in the open market, you can only sell it back to HDB at original purchase price. You think the PAP government will allow that, turning their high profit center HDB into a cost center?

Genie99a SG

Kk I think maybe i need to clarify myself. (Discussing stuff with logical people quite fun)

In life alot depend on luck/hindsight.... doing the same thing as the other 80% of the people does not neccessarily end up with the same result. (referencing to eagles post to me earlier.)

(referencing angel's post on property go upupup)Take property investments for example. You might be O levels or PSLE ... buy a property ... kenna enbloc(that I think more luck than hindsight) or invest wisely then sell at a good profit. Can make 1-200k a year just on that.

However in Singapore to enter the investment market after you buy a HDB is hard. Because the entry alone is at least +-500k on top of your HDB loan if you have not paid it up.

Problem case study ---- 500k (for cheapo private investment)+ 250k(for HDB) = 750k (dun talk about the deposit and all that cham cui lar). How much equity/income you need before bank is even willing to lend you that? For general public or non scholar material (referencing charlize's point) die le lol. Some countries dun have that problem... minimum wage gaotim that nvm u O, PSLE or wat hence charlize's pt is moot but in Sg it is a real problem.

What I'm trying to say is because the avenues of investment in Sg is relatively limited. Bank FD interest is low, investment property entry level is expensive, minimum wage is close to non existant, everything is tied to education and job (dun talk abt self employed, shares and all that lar... to me shares is touch and go dun believe go try). In SG's case (referencing eagle) do what the 80% does will end up like the 80% is true.... but only for Singapore cos of its economic climate/restrictions.

As for angel.... property in singapore not always up up up. Go talk to your dad... around 199x-200x many people lose alot of $ lol because they think property sure +++.

Always have enough equity and cashflow before touch property.

Kind Regards

Genie

Fatum SG

Does anyone have any idea what is the cost of an HDB unit ?

On Page 1 of this thread, the following was offered and which was also the subject of an earlier thread in 2009 :-

Both had reported the following:-

This is from the 20 Percent forced contribution from Singaporean monthly wages and the prevailing approved rate from the Employers - which stands at 16 Percent.

It is interesting that the argument has now arrived to this point with an ingenious question of asking what should "affordability" be in pricing public housing ?

now that's a good example of selective numbers play .....

Here's the yishun dew spring project

http://www.hdb.gov.sg/fi10/fi10296p.nsf/PressReleases/FF131E246C03304A482575230034347D?OpenDocument

There are 144 two room flats - priced at $79 to $90k BEFORE AHGs

There are 216 3 room flats - priced at $120 to $146k BEFORE AHGs

There are 504 4 room flats - priced at $197 - $239k BEFORE AHGs

AHGs ranges from 5k to 40k for each household.

Taking into account that the average AHGs ranges from 20 to 30k, how, pray tell, did you arrive at the figure of over 100% profit ?

And with regards to affordability, personally, looking at the prices here, is a two or three room a stretch for you ?

CheckmateA1 SG

yr 1997 many got their hands burn.

Fatum SG

Just in 2005, a 4-rm flat costs $100k+. The run up to 2007 mania did not just affect Singapore, but worldwide.

Read carefully.

You just proved my point about myopic views.

Well said. I didn't disagree on this point.

While I won't deny that his inventory management has failed, my stand still remains that government policies are usually reactive instead of proactive.

want to know why older flats actually become more valuable ?

read up on HDB SERS scheme. That's why when old flats are being targetted by the HDB for redevelopment, prices actually shot UP !

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